US Treasury Weighs Investing $1 Trillion Cash Pile in $13 Trillion Repo Market
Updated
Updated · Bloomberg · Jul 31
US Treasury Weighs Investing $1 Trillion Cash Pile in $13 Trillion Repo Market
3 articles · Updated · Bloomberg · Jul 31
Summary
$1 trillion in Treasury cash could be deployed into the $13 trillion repurchase-agreement market, reviving an idea last tested before the global financial crisis.
Volatile Treasury cash flows have resurfaced the plan because they are complicating the Federal Reserve’s effort to shrink its balance sheet.
The move would make the Treasury an active repo-market counterparty alongside the Fed’s own liquidity operations, potentially reshaping a core piece of financial-system plumbing.